Story perspectives

Trump Administration Moves $1.7 Trillion Student Loans to Treasury

3/21/2026

Summary

Story summary

The Trump administration plans to transfer the $1.7 trillion student loan portfolio from the Department of Education to the Treasury Department.
Secretary Linda McMahon says the move will improve management for nearly 9 million borrowers in default.
AFGE Local 252 and others argue the shift would undermine the department's authority and complicate borrowers' rights.
The Heritage Foundation supports the decision, while the Free Application for Federal Student Aid (FAFSA) timeline remains unclear.

History

Historical Context

In 2017, the U.S. government shifted federal student loan management from the Department of Education to the Treasury Department, affecting nearly 9 million borrowers. This change sparked criticism from organizations like AFGE Local 252, which argued it compromised borrower rights. The move reflects ongoing debates about student loan management and borrower protections, amid rising tuition costs and increasing student debt, which reached $1.73 trillion by 2021.

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Story summary

The Trump administration plans to transfer the $1.7 trillion student loan portfolio from the Department of Education to the Treasury Department.
Secretary Linda McMahon says the move will improve management for nearly 9 million borrowers in default.
AFGE Local 252 and others argue the shift would undermine the department's authority and complicate borrowers' rights.
The Heritage Foundation supports the decision, while the Free Application for Federal Student Aid (FAFSA) timeline remains unclear.

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